- Fixed: same rate for the term. Variable: moves with your lender's prime rate.
- Breaking a fixed mortgage early can cost much more than breaking a variable one.
- Pick the option you'll sleep well with, not a forecast. Nobody knows where rates go.
I'm not a mortgage professional, and I always send clients to one for this decision. But understanding the basics helps you ask better questions.
How they work
Fixed rate: your rate and payment stay the same for the term (often 3 or 5 years). Predictable.
Variable rate: your rate is prime plus or minus a set margin. When the Bank of Canada changes its rate, prime usually moves. Some variable mortgages change your payment; others keep the payment fixed and change how much goes to interest.
Term vs amortization
- Amortization is how long to pay off the whole mortgage, usually 25 or 30 years.
- Term is how long your current rate and contract last, often 5 years. At the end, you renew.
Compare two rates
25-year amortization, monthly payments, Canadian semi-annual compounding.
Estimates for planning, not financial advice.
Penalties if you break the mortgage
If you sell, refinance or switch lenders mid-term, you may pay a penalty.
- Variable: typically three months of interest.
- Fixed: the greater of three months' interest or an interest rate differential (IRD), which can be several thousand dollars, sometimes much more.
If there's a real chance you'll move within the term, that matters. Ask whether your mortgage is portable (can move to a new home) and assumable.
Questions for your lender or broker
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Your lender's prime rate drops. What happens to a variable rate?
Breaking which mortgage early often costs more?
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Questions people ask
Is a shorter term safer?
It gives you a chance to re-price sooner, for better or worse. The right term depends on your plans and comfort with change.
This article is general information for Manitoba, not legal, tax, mortgage or financial advice. Rules, rates and programs change; figures are estimates as of October 2026. Check your situation with a lawyer, lender or accountant before you act. Adela Strycharz is a REALTOR® with Real Broker Manitoba Ltd. If you already have an agreement with another brokerage, please speak with your own REALTOR® first.